A new Sustainable Aviation Fuel (SAF) financing fund has been established to accelerate its production as the sector moves to cut carbon emissions.

The initiative dubbed the Sustainable Aviation Fuel Financing Alliance (SAFFA), involves major corporate partners, with Airbus serving as the anchor investor.

The fund's creation is backed by Airbus, Air France-KLM, Associated Energy Group, BNP Paribas, Burnham Sterling, Mitsubishi HC Capital, and Qantas.

Together, these companies have committed approximately $200 million to the fund, leveraging their experience and financial expertise to invest in mature SAF-producing projects, such as those using waste-based feedstocks.

Investments will be diversified across various SAF production methods and regions.

The fund aims to accelerate SAF availability by investing primarily in mature SAF-producing projects, such as those using waste-based feedstocks.

This comes at a time when producers of SAF in Europe are struggling to increase output swiftly enough to meet mandated quotas. One major obstacle is the price disparity: biofuel-based SAF is currently three to five times more expensive than traditional jet fuel.

Reports indicate that SAF producers are grappling with uncertainty regarding production levels, fearing potential oversupply in the coming years.

The new investments will be spread across various SAF production methods and regions. Partners may secure SAF offtakes through priority contracts for allocated volumes from these projects.

SAFFA's investments focus on SAF eligible for RefuelEU Aviation or CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) certification.

The alliance's first investment was in Crysalis Biosciences, a company specialising in innovative fuel and chemical production technologies.

Crysalis recently acquired and renovated the Monarch facility, an ethanol plant in Sauget, Illinois, USA, which had been closed since 2019.

By the first quarter of 2024, the facility completed upgrades and received environmental approvals to produce low-carbon SAF and biochemicals.